Commerce Secretary Gary Locke is slated to be with President Obama in Seattle today. He’s also staying for interviews with the press on Wednesday. I can’t make it. And I doubt the disciplined, on-message former Washington governor would have much new to say. But if I could get him to loosen up under the influence of several well-made martinis, I’d love to ask these questions:
1. President Obama committed to doubling U.S. exports over the next five years. Yet the latest trade report shows American exports actually declined while the trade deficit rose substantially. How can the president realistically continue to stick by that pledge when no major policies are being undertaken to change the fundamentals of trade?
2. How can you tell average Americans that they are net winners from the trade status quo? Millions of well-paid jobs have been sent offshore, often with the encouragement of U.S. policy, and now the nation faces its worst unemployment crisis since the Depression. Wages have been flat since the creation of the WTO. At least 3 million high-end service sector jobs are forecast to be sent overseas in the next few years. Nationally, none of this has been offset by export-related jobs. What is the administration doing to reverse this trend?
3. What is the administration doing to address China’s protectionist measures, such as indigenous innovation, preferential treatment of state-owned companies and walled-off “strategic industries,” such as renewable energy? In addition, there’s the huge consumption gap in a nation where most workers are paid very poorly, with little purchasing power for American exports. As former Labor Secretary Robert Reich wrote in Huffington Post:
If the wages and purchasing power of Chinese households continues to rise more slowly than China’s capacity to produce goods and services — more slowly than China’s corporate profits and the government’s share of national income — we’re all in trouble.
Think of China as a giant production machine that’s growing 10 percent a year (this year, somewhat less). The machine sucks in more and more raw materials and components from rest of world — it’s now the world’s #1 buyer of iron ore and copper, and close to the #1 importer of crude oil — and spews out a growing mountain of stuff, along with huge environmental problems.
Faced with this, what is the administration going to do to protect the economic interests of Americans? No, really, what is it going to do?
4. I’m sure you read retired Intel CEO Andy Grove’s article on the hollowing out of America’s high-tech manufacturing, a crisis that cuts to the “ecosystem” of the industry and puts its future in doubt. Do you share this concern? He proposed a tax on the product of off-shored labor. Do you agree? If not, why not?
5. Germany specifically, and the EU in general, have avoided the worst of the trade-related job losses that have hit the United States. Germany, with 82 million people, is the world’s second biggest exporter. What can we learn here? The EU levies a tariff on high-tech electronic goods, helping to keep jobs there. The WTO has ruled against it. Does the administration support the WTO in this?
6. Have another martini. I’ll finesse the expense report.
Today’s Econ Haiku:
Wall Street likes those deals
So what if more jobs are lost
They pocket big fees